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View from the Hill Blog: Farm energy programs take a hit

By Grace Boatright, View From the Hill - National Grange Blog (2/17/12)

  FEBRUARY 22, 2012 --

“Where’s my cut?” was the name of the game in Washington this week (isn’t it always though) as the President released his proposed budget for fiscal year 2013. Already, the President’s budget is being termed “dead on arrival;” as its call for a dramatic increase in the tax rate sits uneasy with many in Washington, but nonetheless, it’s a perfect venue for determining just what the President’s priorities really are. After looking over the President’s budget, specifically agricultural spending, it’s very clear that the Obama Administration lacks an understanding of just how agriculture works and how it can benefit the US economy.

There are several unsettling terms in President Obama’s proposed budget that will have a very negative impact on the 2012 Farm Bill, particularly for bioenergy programs. During the USDA budget briefing on Monday, Secretary Vilsack specifically stated that there is “unlimited opportunity in the bio-based economy.” Apparently, the Obama Administration disagrees.

The 2008 Farm Bill had authorized $1.037 billion in mandatory funding and $1.113 billion in discretionary funding to “advance the development of bioenergy and other types of renewable energy and energy efficiency across rural America.” Under that direction, various programs were created, including the Biomass Crop Assistance Program (BCAP), the Biorefinery Assistance Program (BAP) and the Rural Energy for America Program (REAP). It seems plans have changed, because the President’s proposal only offers $4.6 million in discretionary funds for loans issued under REAP, and pretty much nothing else for other farm energy title programs. This is going to force Congress to consider whether or not to continue with these programs at all.

As for other agricultural programs in the President’s budget, there are mixed reviews. Here is a summary of what the budget does to other areas of American agriculture: 

  • Cuts $32 billion over 10 years by eliminating direct payments
  • Cuts over $10 billion from administrative costs over the next 10 years in an effort to restructure crop insurance payments
  • Caps the Conservation Reserve Program at 30 million acres, saving $977 million over 10 years
  • Increases the USDA’s Research, Education, and Economics  (REE) by $68 million
  • Continues to fund the Market Access Program (MAP) and the Foreign Market Development Program    (FMD)
  • Wheat researchers receive an additional $500,000

This is just an overview of what the President’s budget recommends for the 2012 Farm Bill. Naturally, Congress must approve his budget for it to proceed, and it rarely ever gets passed as it was initially written. 

Wednesday saw the first hearing this year on the 2012 Farm Bill, and numerous others are scheduled in coming months. Those hearings will probably provide a better picture of how things are actually going to land. Even so, it’s nice to know the level of faith that the President and his administration have in rural America and its ability to contribute to energy innovation, economic growth, and the reduction of the deficit. We’ll keep you posted. 

-Grace Boatright
National Grange Programs Assistant 

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